Auditors found high operational costs at the Hempstead Animal Shelter among other problems, State Comptroller Thomas P. DiNapoli said today. The audit was undertaken after requests by town residents and Nassau County District Attorney Kathleen Rice.

“The shelter’s finances and animal care issues have long been a concern of town residents,” said DiNapoli. “Our audit has shed much-needed light on several of the problems that plague the operation of this facility. The shelter’s finances need to be more closely scrutinized to ensure that animals receive proper care and taxpayers aren’t paying excessive costs. I want to thank District Attorney Rice and the concerned residents of Hempstead who brought this issue to my office's attention.”

“Comptroller DiNapoli’s comprehensive and thorough audit has shown the Hempstead Animal Shelter to be a case study in mismanagement, poor record keeping, and budgetary incompetence,” said Rice. “While these problems do not rise to the level of criminality, the Comptroller’s review found systemic problems that compromise the public’s confidence and could detract from the shelter’s overall mission and responsibility to its animals and the community. While our investigation found no criminal abuse or neglect of the shelter’s animals, both the animals and taxpayers will be well-served if the town promptly adopts the Comptroller’s recommendations. I want to thank Comptroller DiNapoli and his staff for their outstanding work.”

Auditors found operational costs at the Hempstead shelter were greater than the costs associated with animal shelters in the Towns of Islip and Brookhaven in every category reviewed – total costs; costs per animal processed; total salaries; salaries per animal; total health services costs; and health cost per animal.

In 2010, for example, the total salary costs in Hempstead were $2.7 million. By comparison, Islip spent $820,076 and Brookhaven $1.5 million on salaries. The average salary for Hempstead’s 32 full-time employees was $79,247.

Auditors also found that taxpayers outside the town’s 22 villages funded more than $12.7 million of the shelter’s costs because the shelter was not properly accounted for in the town’s general fund. Although the audit only covered a five-year period, this practice has existed for nearly 20 years.

Because operating funds receive tax revenue from different tax bases, town officials must accurately budget and record revenues and expenditures in the proper funds to maintain equity among taxpayers.

The town-wide general fund has a property tax base that encompasses the entire town, including the villages. The town-outside-village fund has a property tax base that encompasses only the portion of the town that lies outside of the incorporated boundaries of the villages. Hempstead officials improperly accounted for and reported the animal shelter’s financial activities in the town-outside-village fund, according to the audit.

Other audit findings include: · The shelter did not have formal procedures on how to manage, document, approve and verify overtime worked. The town paid $359,408 for 8,860 overtime hours worked at the shelter from 2007 to 2011. The overtime hours reviewed by auditors could not be adequately justified; · The town-wide general fund inappropriately charged the shelter $3.5 million in 2010 and $2.6 million in 2011 for administrative cost charge-backs. · Administrative costs charged to various departments did not reflect the actual services received. · Supervisory staff did not periodically review the office copy of issued receipt forms, and did not investigate and document in writing any variances in information, gaps or missing receipt forms.

DiNapoli recommends town officials evaluate the animal shelter’s operations and present the town board a plan to improve the shelter’s cost efficiency.

The audit also called on town officials to: · Ensure the animal shelter’s revenues and expenditures are budgeted, accounted for, and reported in the town-wide general fund, as statutorily required. · Determine the extent to which property taxes have been overcharged to town-outside-village taxpayers and develop a reasonable plan to resolve the taxpayer inequity. · Adopt a formal overtime policy with detailed procedures to ensure that overtime is preauthorized by the animal shelter director. The policy should include guidelines for what reasons overtime will be worked, and how the overtime will be verified. · Implement internal controls to ensure duties over cash receipts are properly segregated, and that cash is collected and reconcilable against all source documentation. · Ensure that all claims for professional services are itemized and that services performed are clearly defined and match the contract services and rates.

Although the town disagreed with some of the audit findings, officials indicated they would implement a number of recommendations. The full response from the town is included in the report.

Grim Audit Results

“Comptroller DiNapoli’s comprehensive and thorough audit has shown the Hempstead Animal Shelter to be a case study in mismanagement, poor record keeping, and budgetary incompetence,” said Nassau County District Attorney Kathleen Rice.